The African Continental Free Trade Area (AfCFTA) agreement was signed by 44 nations including Ethiopia, in Kigali Rwanda on Wednesday, March 21, 2018. The agreement that was signed during the 10thExtraordinary Session of the Assembly on AfCFTA is expected to set up a large free trade area to boost economic growth and improve regional integration across Africa.
The agreement commits countries to removing tariffs on 90 percent of goods, with 10 percent of “sensitive items” to be phased in later. The agreement will also liberalize trade in services and might in the future include free movement of people and a single currency.
“With the signature of the Kigali Declaration for the Launch of the African Continental Free Trade Area, Africa makes a giant stride forward in continental integration, in the pan-African vision, and in the development of our continent,” said Vera Songwe, the Executive Secretary of the ECA during the signing ceremony.
Songwe also noted that the historical moment shows the resolve of African leaders to bring the continent’s diversity together and make the flagship project of the African Union Agenda 2063 a reality.
It is stated that while 44 countries signed the AfCFTA, a total of 50 nations have signed either the agreement or the Kigali deceleration underscoring their commitment to the agreement,which aims at doubling intra-African trade by removing non-tariff and tariff barriers on goods and services.
It was further said that 27 countries also signed the separate African Union Protocol on Free Movement of People, which complements the AfCFTA by providing for visa-free travel, the right of residency and the right of business or professional establishment, for citizens between signatory countries.
”The AfCFTA was the culmination of a vision set forth nearly 40 years ago in the Lagos plan of action adopted in 1980”, for a continent-wide market,” stated President of Rwanda Paul Kagame in his key note address.
Also speaking during the historical ceremony attended by 19 heads of state, and additional prime ministers and foreign ministers, Moussa Faki Mahamat, Chairperson of the African Union Commission stated that “Africa is a sleeping giant that can’t wake up if the continent is divided. It’s time to accelerate the pace of integration, as international competition leaves no room for the weak”, and he called upon African Member States to also sign the Protocol on the free movement of persons, enabling the creation of an African passport.
According to the ECA, among the key beneficiaries will be small and medium sized enterprises, accounting for 80 percent of the region’s businesses; women, who represent 70 percent of the informal cross-border traders; and the youth, who will be able to find new employment opportunities.
ECA estimates that AfCFTA has the potential both to boost intra-African trade by 52.3 percent by eliminating import duties, and to double this trade if non-tariff barriers are also reduced.
The agreement brings together 1.2 billion people with a combined gross domestic product (GDP) of over 2 trillion USD.